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Moving from Hobby to Business
Posted by: Ken Brown 2 (---.229.194.3.res-cmts.sm.ptd.net)
Date: December 16, 2019 08:20AM

I know there are many of you out there that build rods for a business. I am currently doing it as a hobby and was curious how much is needed to move it into a business. I am putting a good amount of $$ into components and such, curious to see f I can actually make some side money as a result. With all the technology available, it seems that getting a customer base is somewhat easier today.

The part I don't really understand is the actual 'business side' of owning a business. I know there are tax implications and all that. Is it an easy thing to get started or is it a major pain in the butt?

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Re: Moving from Hobby to Business
Posted by: Tony Boschi (---.se.biz.rr.com)
Date: December 16, 2019 09:55AM

Legalzoom.

its the easiest and fastest way to get yourself up and running, getting you completely legal with all the paperwork done and filed for you. All you have to do is fill out all the pertinent information, pay the fee, and they do the rest.

I am sure others will chime in with their suggestions but this is how my girlfriend and myself set up our entire "LLC" business. We pay a fee every year to keep things up and running and they do the rest.

As for the "tax implications", my girlfriend keeps an eye on that portion with Excel spreadsheets and I also have a "tax accountant" who also does my yearly taxes.

Tony Boschi
Banana River Rods
Merritt Island, Florida



Edited 1 time(s). Last edit at 12/16/2019 09:57AM by Tony Boschi.

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Re: Moving from Hobby to Business
Posted by: Tom Kirkman (Moderator)
Date: December 16, 2019 10:08AM

Typically your city or county may require a business license and your state may have its own requirements. In addition, there is the Federal Sportfishing Excise Tax for which any custom rod sale is liable.

Putting your product in front of potential customers is indeed easy these days. Because of that, there are more custom builders, and therefore more competition for that customer base, than ever before.

No business is exactly easy, but you may find you enjoy it and can perhaps make a little money at the same time. Don't overlook rod repair in the scope of your business.

...........

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Re: Moving from Hobby to Business
Posted by: Ken Brown 2 (---.229.194.3.res-cmts.sm.ptd.net)
Date: December 16, 2019 12:29PM

Thanks for the responses! LegalZoom sounds like a good starting point as I have absolutely no clue where to start for that. If I go down the road of starting up a business, I will definitely have an accountant on retainer.

I had no idea there was a special tax for custom rods..thanks Tom. So on top of the taxation of the income I would receive from any rods sold, I also have to pay an extra 'sportfishing' fee..thats neat!...argh!

I would definitely include rod repair in any type of services I would perform. I would think that starting out, I would get more consistent business for repairs. I have had many people in my family 'wanting a custom rod', but so far no one willing to pay for one.

Just to add, thanks to Tom for creating this site! It has been and continues to be my 'go to' for any information that gets me more excited to build more and more rods!!

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Re: Moving from Hobby to Business
Posted by: Tom Kirkman (Moderator)
Date: December 16, 2019 01:00PM

Do a search of this forum for the Sportfishing Excise Tax. If there is such a thing, it is a good and worthwhile tax to be paying. Bottom line, it results in a tax liability of 10% of your selling price (6% if sold direct to the end user) or $10, whichever is less.

There is also an article on the subject in the online library here.

..............

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Re: Moving from Hobby to Business
Posted by: Lance Schreckenbach (---.lightspeed.hstntx.sbcglobal.net)
Date: December 16, 2019 02:18PM

Excel spread sheets can help a whole lot to keep your balances. I would learn how to make your own if you don't already. I had a small surfboard business back in the 80's before we had this digital world and there are a lot tools out there now to help stay on top of your P & L. I would look for places in your area that sell fishing equipment / rods and see if they will let you sell them in their store front. Try to keep your overhead down as much as possible by doing what you can do without contracting it out until you have to. Good luck!

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Re: Moving from Hobby to Business
Posted by: Ron Schneider (---.mthmcmta01.res.dyn.suddenlink.net)
Date: December 16, 2019 04:44PM

Consider some accounting software like "Quickbooks".
If you get started on the right track, it is much easier down the road.
No matter what, keep some kind of record of orders placed and received, and parts sold/installed.
And "build/repair" forms to help keep track.
There is info like that available on this site, just do a search.

Things like tip tops in a divided and identified parts box are a big help.
Try to be at least somewhat organized to start with, and it will not be so hectic as you grow.
if you have a Community College close by, they may have a course you can take also.'
And do't forget the "online world" for help with inventory record keeping, etc.

Best wishes,
Ron Schneider
Schneider's Rod Shop
Mountain Home, Arkansas
[www.schneidersrods.com]
schndrod@suddenlink.net
870-424-3381

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Re: Moving from Hobby to Business
Posted by: Ken Brown 2 (---.229.194.3.res-cmts.sm.ptd.net)
Date: December 17, 2019 07:45AM

I am familiar with creating spreadsheets and such so the 'being organized' is one thing I tend to lean towards. I would definitely invest in a QuickBooks version. I would definitely need to keep track of my expenses and such.

I have my various components laid out in different plano boxes. I would just have to invest in a label maker to identify the different guides and tip-tops.

I was thinking of creating a cheat-sheet type thing for the guide spacing on rods as well. I saw a you-tuber doing this which would make for an easy recreation of an existing build.

If I get real serious, then I will buy a domain and create a website. That way I can access the social media avenue to bolster possible sales.

Its been fun building rods for myself, thinking it might be time to take the next step.

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Re: Moving from Hobby to Business
Posted by: roger wilson (---)
Date: December 17, 2019 07:52AM

Ken,
One thing that I found to be very convenient when doing bulk builds is a guide template.

I would often build a lot of the same rod. As a result, I created a cardboard template where I simply laid the blank on the template for quickly marking the blank for placing the guides. It is much quicker than using a tape or ruler for measurements when building a lot of the same rods.

Another thing that really helps if using cork grips is to have a custom reamer for each different blank that you are using. A quick pass of the reamer, and the grip is ready to go.

Much depends on what sort of business are you going to do. Are you going to be doing volume or are you going to be doing more specialized with custom features.

Best wishes on your new endeavor.

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Re: Moving from Hobby to Business
Posted by: Ken Brown 2 (---.229.194.3.res-cmts.sm.ptd.net)
Date: December 17, 2019 09:10AM

I haven't thought too far into it yet. I would like to do volume, however, you kinda need a customer base first :)

Infancy stages at this point. Just trying to determine the feasibility while having a full time job.

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Re: Moving from Hobby to Business
Posted by: roger wilson (---)
Date: December 17, 2019 10:45AM

Ken,
Any thoughts as to the total number of hours per rod you expect to expend to deliver your finished product. i..e what do you expect to earn as an hourly rate?

The reason that I ask this very basic question is that if you do the research and find that you are going to be making 50 cents an hour after all is said and done - will you really have a viable business.

One would hope that for a business, that you would be able to make a similar or greater income than you make with a full time job. If not, perhaps it would just make sense to add another job similar to your current job, rather than starting a new business.

In a word, if someone does something and makes little to no money when doing the task, it is a hobby.

If a person makes a reasonable profit with a reasonable hourly rate of income, it is a business.

Just be sure that you assemble, your ducks, line them up and then take on the task in its totality - if starting a business.

As you said,. you can have the best product, you can have the best materials, you can have the best work flow to complete the work. But, if you do not have buying customers, it is pointless to start.

Best wishes in your endeavor.

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Re: Moving from Hobby to Business
Posted by: Fred Yarmolowicz (165.225.48.---)
Date: December 17, 2019 11:03AM

One thing I see many do is lower their price as their efficiency increases. Not a good business model. For instance what used to take and hour and you charged $12 for May now only take you 30 minutes. I have seen plenty of people pass that to the customer in savings. Not a way to do business, you will never make a good profit. Your efficiency needs to benefit you. Keep the prices steady as your ability gets fine tuned. I earn my living as a flat rate technician and would still be making the same money I was 25,years ago if my pay got cut every time I got more efficient

Freddwhy (Rapt-Ryte)

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Re: Moving from Hobby to Business
Posted by: Tom Kirkman (Moderator)
Date: December 17, 2019 11:36AM

Custom builders who seek to do "volume" generally don't stay at the business too long. The requirements for such type production put you into the same sort of business as the commercial rod makers which whom you cannot compete with on price, warranty or marketing. A few have been able to get by on volume, but to do it they almost always have to end up becoming small, almost semi-mass producers. There are only so many hours in the day, after all.

I would wager that the most successful custom rod builders don't do much in the way of volume. They build to what they hope is an upper end clientele, or those who can appreciate a higher end product and are willing to pay for it. Of course, this requires that your work be of the highest caliber and that you be competent in various tasks, both functional and aesthetic. In the end, ask yourself if you would rather build 50 rods per year at $500 each, or 150 rods per year at $150 each. The former is generally more rewarding, less taxing and nets you just as much or more money.

This is a wide ranging subject and not quite what the OP was requesting, but it is something to think about.

..........

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Re: Moving from Hobby to Business
Posted by: roger wilson (---)
Date: December 17, 2019 11:37AM

Copy that Mr. Kirkman.

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Re: Moving from Hobby to Business
Posted by: Ken Brown 2 (---.229.194.3.res-cmts.sm.ptd.net)
Date: December 17, 2019 03:43PM

Lots of things to consider for sure. Like I said previously, no money made as of yet. So far, thinking the feasibility of the business probably isn't that great. I would love to devote all my time to get it up and running but the reality is that there are other things that are more important. Ill keep researching and seeing what is possible. Thanks for all the replies.

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Re: Moving from Hobby to Business
Posted by: Fred Yarmolowicz (165.225.48.---)
Date: December 18, 2019 06:58AM

Ken most builders I know fantasize about going into business.,what could be better ?? You are doing something you love. Problem is it at one point becomes a job And the enjoyment you get from building becomes the stress you were relieving with your rod building hobby.

Freddwhy (Rapt-Ryte)

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Re: Moving from Hobby to Business
Posted by: George Mason (---.ec.res.rr.com)
Date: December 18, 2019 07:39AM

Fred Yarmolowicz Wrote:
-------------------------------------------------------
> Ken most builders I know fantasize about going
> into business.,what could be better ?? You are
> doing something you love. Problem is it at one
> point becomes a job And the enjoyment you get
> from building becomes the stress you were
> relieving with your rod building hobby.

Appreciate all the responses but for someone who has also considered this question - personally, this is THE SINGLE most important point in this thread. Well put. Good Luck Mr. Brown.

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Re: Moving from Hobby to Business
Posted by: Ken Brown 2 (---.229.194.3.res-cmts.sm.ptd.net)
Date: December 18, 2019 08:08AM

I fully understand that something could become stressful. Has anyone stopped building rods because it did become too stressful?

I get frustrated sometimes with it just because I want the rod to come out a specific way and sometimes it just doesn't work out that way. Since it is a hobby at this point, its not that big of a deal. If I as building for a customer and it didn't come out right, I can see how that can become very stressful.

I liken this to how I perform my full time job now. Sometimes it is stressful, sometimes it is not. If you can handle the good and the bad then you can apply that mentality to any situation regardless of what it is you are doing.

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Re: Moving from Hobby to Business
Posted by: ben belote (---.zoominternet.net)
Date: December 18, 2019 08:18AM

stay away from bass fishermen..too many learned about rod care from bill dance..lol.

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